FBI agents searched the offices of three hedge funds in an ongoing insider trading investigation that is expected to result in arrests of Wall Street traders and brokers.

The FBI searched the offices of Level Global Investors along Seventh Avenue in Manhattan as well as Diamondback Capital Management in Stamford, Conn., and Loch Capital in Boston. FBI spokesman Richard Kolko confirmed the searches, saying agents were armed with "court-authorized search warrants."

Officials are not saying which executives or traders may be the subject of the criminal investigation. And they stressed no arrests or charges were filed Monday.

U.S. Attorney Preet Bharara has called insider trading "rampant' and said he suspects some of the richest and most powerful figures on Wall Street are involved. Federal investigators have been using wiretaps to listen in on broker conversations to build these cases, officials have said.

Level Global is headed by David Ganek. He founded the firm in July 2003 and also serves as the Portfolio Manager of Level Global LP. Ganek had worked as at SAC Capital. Andy Merrill, a spokesman for Level Global, issued an email statement:

“We can confirm that agents from the Federal Bureau of Investigation visited our offices this morning as part of what we believe to be a broader investigation of the financial services industry discussed in media reports over the weekend. We are cooperating fully with the authorities and, at the same time, we are fully operational and continue to work diligently for the benefit of our investors.”

In a statement, a Diamondback spokesman said: "We received an inquiry this morning from the FBI. Diamondback is voluntarily cooperating. The firm is fully operational and we, along with our team, continue to manage the portfolio and Diamondback’s business for the benefit of our investors."

The Wall Street Journal has reported investigators are looking into activities by current or former members and associates of the SAC hedge fund as part of the investigation.

John Kinnucan, who runs a Portland, Oregon research company, told the Journal that he had been approached by FBI agents asking him to wear a wire for his conversations with SAC and other traders. Kinnucan told the paper he denies wrongdoing and declined the FBI approach.

He said he instead sent an email to his clients stating he declined the FBI's "gracious offer to wear a wire and thus ensnare you in his devious web."

Kinnucan did not return a call for comment but he told the Journal that the approach by the FBI felt like a "street mugging."

A spokesman for SAC declined to comment.

It was back in October that Bharara -- the top federal prosecutor in New York -- said insider trading on Wall Street is 'rampant' and suggested many new arrests could soon occur.

"Unfortunately, from what I can see, from my vantage point as the United States' Attorney here, illegal insider trading is rampant," said Bharara. "Because illegal insider trading appears so prevalent ...we have devoted significant resources to this. There is more deterrence to be achieved."

Bharara did not say when -- or how many -- new arrests of Wall Street traders might take place. But in his speech, he stated, ''Insider trading I predict will become a bigger issue in the future."

It was a year ago billionaire Raj Rajaratnam was charged with conspiracy and securities fraud in an FBI insider trading case. More than 20 traders and corporate insiders have been charged in cases where the FBI used court-authorized wiretaps to record the alleged illegal trades.

One official said Monday any decision on criminal charges could still be weeks away. Some white-collar experts weighed in on the news of the FBI action.

"If the use of non-public information by some is as widespread as the government's ongoing probe suggests, then this is another in a long line of scandals undermining public confidence in the strength and security of our capital markets," said Mark Rifkin of Wolf Haldenstein Adler Freeman and Herz. "Aggressive enforcement is long overdue."